Greetings again my dear friends, many are the economic variables that can capture our attention, being one of the most striking the inflation and beyond the hyperinflation, this variable activates a process of loss of value of the different currencies implemented in any economy in the world, for example, the dollar, the euro, among other currencies of local use. This results in the increase in the price of goods and services over time.

Each country lives its own economic reality, where particular measures are taken, and these measures will have an impact on the permanence of the value of its internal currency or on its devaluation, and the latter will bring about the activation of the inflation variable, the extent of which will depend, of course, on the productive strength of a given country in all its areas.

Every economy is exposed to experience some type of inflation, either by presenting changes in some of its fundamental variables, bringing with it an increase in demand and impacting the overall supply of a country, this causes prices to increase, thus causing inflation, or even worse, hyperinflation.

Some harmful effects of hyperinflation both at the personal and societal level

When we live in a country with a constant hyperinflation, we can express with our own experience, some of those harmful effects that have harmed us so much, therefore, I share with you some of them:

• One of the most representative and harmful effects for our personal finances or as a society, is that it harms our precious purchasing power, and even more, if we receive fixed incomes, so we would not have the possibility of saving, and savings are generally destined to investment, both in goods or services, but also in starting a business.

• Inflation, or even more, hyperinflation, harms all lending institutions, because it is almost impossible to set long-term constant interest rates. This is particularly true for both private and public banks in a country.

• It harms the durability of small traders, who have to buy on a small scale, and in many cases, they are unable to recover their investment, let alone make a profit.

• One of the macro-level consequences of hyperinflation is the climate of distrust that is generated at the moment of wanting to make an investment, since a country with hyperinflation experiences constant devaluation, both of its internal currency, as well as all the circulating currencies, whatever they are called.

Beyond the factors that generate hyperinflation in a country, the important thing is to make decisions focused on strengthening the productive sector, so that it can keep pace with the demanding requirements that may arise at any given time, and of course, without sacrificing the purchasing power of the affected population.

Until another opportunity my dear friends.

Bibliographic reference recommended

[1]The monetary dynamics of Hyperinflation.